Be involved in the agreement from day one
Approximately 25% of integration efforts come from or involve IT teams, but the most common pitfall to the M&A transaction process is the post-merger IT systems integration because CIO’s are all-too-often brought in after the excitement-driven agreements are made. This can result in unwanted surprises in the systems area, delays and complexity which can lead to integration failure.
Without a CIO’s expertise, many businesses underestimate their reliance on technology and systems for business-critical operations. IT is the foundation for customer-facing services, operational and accounting processes, procurement services, collaboration and communication services and many other key functions within a business.
Recognising CIO’s as key decision makers during the due diligence process from the outset is integral to businesses receiving a realistic assessment of what is possible in what time, and to prepare for any potential roadblocks.
Ensuring that operational readiness is achieved at the appropriate times is critical to ensure a seamless transition and to ensure the business impact is minimised. As is often the case, whilst a large majority of services migrated will fold nicely into an existing operational support capability, there will be new services that current teams aren’t knowledgeable in and/or are not properly trained to manage. Skills uplift, new hiring and/or partner engagement become critical activities that require appropriate planning to ensure a smooth transition of each service to operations.
Along with operational readiness, it is vital that CIO’s maintain governance over Transition and Transformation activities during a migration. Migrations often create opportunities for the new business owners to undertake significant transformation activities during an M&A integration project which can place significant time and cost risks into the project and can create the potential for timeline blowouts and/ or penalties.
Foregoing involvement of CIO’s in the M&A process can result in complex and risky complications, including:
- Increased expenditure: With IT being at the core of almost every business and IT spending being one of the largest categories of costs for an enterprise today, it is critical the IT integration of an M&A occurs rapidly and seamlessly to avoid unnecessary and increased business impacts and costs.
- Missed opportunities: CIO’s are best equipped to understand the operational systems and where they might be impacted. The CIO’s role should be to balance integrating the applications, infrastructure, collaboration, site and security technologies of the acquired asset whilst maintaining zero-business-disruption, so the business can stay on course to drive the strategic value of such an important investment.
- Avoidable disruptions: Involving the CIO’s from the outset ensures teams, processes, and systems are merged effectively and efficiently, all the while maintaining ‘business as usual’ for the enterprise, and for the acquired business division.
To learn more, download our detailed guide for CIOs embarking on an M&A journey.